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Anti-money Laundering Quiz

Comprehensive quiz covering anti-money laundering regulations, compliance requirements, due diligence procedures, and reporting obligations for financial services firms.

Topics Covered: Proceeds of Crime Act, Money Laundering Regulations, Terrorism Act, FATF recommendations, customer due diligence, suspicious activity reports, politically exposed persons, and regulatory requirements.

This quiz is specifically designed for compliance officers, MLROs, financial crime specialists, and individuals preparing for AML certification and regulatory examinations.

Anti-money laundering quiz, AML, POCA, Money Laundering Regulations, SAR, CDD, EDD, PEP, financial crime, compliance

Anti-money Laundering Quiz

1. What is the primary purpose of the Consumer Credit Act 2006?

A. To harmonize UK consumer credit laws with EU financial directives
B. To establish the Financial Conduct Authority as the sole credit regulator
C. To introduce mandatory affordability checks for all credit applicants
D. To increase protection for borrowers in consumer credit agreements

2. What is the primary purpose of the Proceeds of Crime Act 2002 in relation to money laundering?

A. To define tax evasion as a civil offence under financial law
B. To criminalize the concealment, acquisition, or use of criminal property
C. To require banks to report all cash transactions over £5,000
D. To ensure cryptocurrency cannot be used illegally

3. Which of the following is a key requirement under the Money Laundering Regulations 2017?

A. Firms must adopt a risk-based approach to anti-money laundering measures
B. Firms must report all international transactions above £1000
C. Firms must conduct stress testing of IT infrastructure
D. Firms must notify HMRC of all client onboarding procedures

4. What is the definition of 'terrorist property' under the Terrorism Act 2000?

A. Assets held by individuals flagged under international sanctions lists
B. Money or property likely to be used for terrorism purposes
C. Property seized during counter-terrorism operations
D. Property linked to politically exposed persons

5. Which of the following is a principal money laundering offence under the Proceeds of Crime Act 2002?

A. Failing to register with the Financial Conduct Authority
B. Concealing, disguising, converting, or transferring criminal property
C. Providing financial services without a consumer credit licence
D. Mis-selling financial products to vulnerable clients

6. What is the threshold for occasional transactions requiring customer due diligence under the Money Laundering Regulations?

A. €7,500
B. €10,000
C. €15,000
D. €25,000

7. What is the role of the Money Laundering Reporting Officer in a firm?

A. To approve all client onboarding documentation
B. To oversee the firm's anti-money laundering systems and controls
C. To ensure compliance with anti-money laundering legislature
D. To manage the firm's data breach

8. Which EU directive introduced the requirement for public access to beneficial ownership registers?

A. Second Money Laundering Directive
B. Fourth Money Laundering Directive
C. Fifth Money Laundering Directive
D. Seventh Money Laundering Directive

9. Which of the following is a key requirement for firms under the FCA's anti-money laundering rules?

A. Firms must provide regular training to staff on money laundering risks
B. Firms must submit monthly transaction logs to the FCA
C. Firms must enforce compliance with threats of legal proceddings
D. Firms must outsource AML compliance to third-party specialists

10. Which organization sets international standards for anti-money laundering and counter-terrorist financing?

A. The Basel Accord
B. Financial Action Task Force
C. The United Nations
D. International Monetary Fund

11. What is the minimum percentage ownership that qualifies someone as a "beneficial owner" under the Fourth Money Laundering Directive?

A. 10%
B. 25%
C. 15%
D. 20%

12. What is the primary purpose of enhanced due diligence?

A. To protect client assets
B. To apply stricter checks for high-risk customers
C. To enhance screening for politically exposed persons
D. To verify transaction validity

13. Which UK body is primarily responsible for investigating serious and organized crime, including money laundering?

A. Financial Conduct Authority
B. National Crime Agency
C. Prudential Regulation Authority
D. HM Revenue & Customs

14. Under the Fifth Money Laundering Directive, which of the following is now subject to AML regulations?

A. Casinos
B. Virtual currency providers
C. Clubs and bars
D. Nonprofit Organisations

15. How long must firms retain records of customer identification under the Money Laundering Regulations?

A. 1 year after the relationship ends
B. 3 years after the relationship ends
C. 5 years after the relationship ends
D. 10 years after the relationship ends

16. What is a "politically exposed person" in AML terms?

A. A celebrity with strong political influence
B. An individual vulnerable to corruption due to their prominent position
C. A high-net-worth individual with connections to government
D. A retired government official

17. Which of the following would be considered a 'red flag' for potential money laundering?

A. A customer depositing small, regular payments
B. A customer quickly repaying a large loan with unexplained cash
C. A customer overpaying their mortgage from inheritance
D. A customer using online banking to buy cryptocurrency

18. What must a firm do if it suspects a customer is involved in money laundering?

A. Close the customer's account immediately
B. File a Suspicious Activity Report
C. Request additional identification documents
D. Inform the FCA of the suspicion

19. What is the key requirement for simplified due diligence?

A. Offshore connections
B. A well known figure
C. High‑value transactions
D. Low‑risk customer profile

20. Which FCA Handbook section requires firms to conduct regular AML training?

A. MCOB 7.1
B. COBS 11.2
C. SYSC 6.3.1
D. ICOBS 5.3

21. Which FATF recommendation covers transparency of beneficial ownership?

A. Recommendation 40
B. Recommendation 10
C. Recommendation 24
D. Recommendation 33

22. Under POCA 2002, what is the penalty for 'tipping off'?

A. Up to 2 years imprisonment
B. Unlimited fine
C. Up to 5 years imprisonment
D. 14 years imprisonment

23. What is the main purpose of a 'source of wealth' check?

A. Ensure sufficient tax has been paid
B. Verify legitimacy of funds
C. Determine creditworthiness
D. Speed up transactions

24. Under 5th MLD, what is required for cryptoasset firms?

A. Exemption from CDD
B. Anonymous transactions
C. Registration with FCA
D. Blockchain based record keeping

25. Under Money Laundering Regulations 2017, when must a SAR be filed?

A. Within 48 hours
B. Annually
C. As soon as practicable
D. Upon data breach

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